Skills shortages in the UK and EU are undermining growth prospects, new study suggests

A shortage of technical skills is jeopardising the prospect of economic growth in the UK, the latest Grant Thornton International Business Report (IBR) suggests.

38% of firms polled in the study say they are struggling to recruit appropriately qualified and experienced staff, and almost three-quarters (72%) cite a scarcity of technical skills as the most pressing problem. Almost one-fifth of UK respondents believe that skills shortages will threaten their businesses’ expansion prospects in 2013.

Grant Thornton’s UK CEO, Scott Barnes, acknowledged that while employment numbers hit a record level last year, many businesses were still struggling to find properly qualified people for technical roles. He said: “Investment in internal training programmes, aligned closely to business need, is needed to broaden these talent pools. By developing their people, companies will be able to deliver on strategy, innovation and, ultimately, growth.”

The report shows that the skills shortfall is EU-wide: 51% of European firms report a shortage of suitably qualified applicants, compared to 40% in the UK. 55% of UK respondents said that lack of work experience among candidates was a contributing factor, and 40% reported a lack of qualifications.

Mr Barnes said that he hoped the report would give fresh impetus to the improving dialogue between business leaders, government and educational institutions. Business leaders were crying out for skilled staff, he said, yet many people remain out of work. He added: “Efforts to boost skills should be high on the public policy agenda.”

Although not mentioned directly in the report, one intermediate solution immediately suggests itself: hiring highly skilled professionals who work flexibly through Umbrella Companies.